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Price wasn't the reason why the London Metal Exchange picked Hong Kong Exchanges and Clearing as its preferred buyer, the LME's chief executive said on Tuesday.

Martin Abbott said the LME board instead identified the need to stay one step ahead of China by actively growing its business there as a key reason to pick Hong Kong Exchanges over IntercontinentalExchange.

Hong Kong Exchanges has offered to pay £1.338bn for the 135-year old exchange, which dominates the global trade of metals such as copper and aluminum.

"A number of very serious international exchanges were involved in the bidding process and bid competitively," Abbott said. "The winning price wasn't a million miles away from the others; it isn't as if we had a rank outsider from the outset."

Speaking at the IDX International Derivatives Expo in London, Abbott said his biggest worry in years prior to the bidding process, which began last year, was the growing dominance of China and the potential risks that posed to the LME's business.

"The threat to [the LME] from Asia is what kept me awake at night. Our volumes are up 10% roughly year-on-year, and that growth is being driven by what's happening in Asia," he said. "My concern was what would happen if China opened up its markets in a more liberal manner, and whether we'd be left behind."

The LME operates on a constrained profit model, which means that its historic earnings don't reflect its future, Abbott said. Earnings growth in the near-term will come from an increase to fees, set to come into effect next month, and the establishment of its own clearing house, known as LMEClear.

"Add to this future potential growth in volumes and business from Asia, and we think the LME has achieved a great price, for its shareholders as well as for the Hong Kong Exchanges shareholders," Abbott said. "We had a number of compelling propositions, and the LME was in the happy position of being able to choose between different good stories."

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After the acquisition, Hong Kong Exchanges has pledged to enhance the LME's market data distribution and connectivity into Asia, to support the LME in expanding its warehouse network in Asia, and to introduce new products and services. It also said it will expand the number of mainland Chinese participants and clients in the LME.

Abbott slammed critics that say Hong Kong Exchanges is too close to China, and that the LME will eventually lose control of its franchise.

"I'm confident of the independence of Hong Kong Exchanges," he said, noting its shareholding is widely spread globally and the number of UK citizens on its board as independent directors.

"Of course, Hong Kong Exchanges has close contact and good relationships with people in China, just as it hopes we do with regulators and stakeholders in Europe," he added.

Abbott said that the idea that the inaccessibility of China to the West acts as a protection for exchanges in that country is a red herring. "The need for protection (by Chinese exchanges) will be apparently redundant in a few years, as it'll prevent China from expanding beyond its borders," he said. "Competitors will act on a global basis, and that's healthy."

LME shareholders, who are also its members, are to vote on the deal next month.